Correlation Between CHEMICAL INDUSTRIES and ASML Holding

Can any of the company-specific risk be diversified away by investing in both CHEMICAL INDUSTRIES and ASML Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CHEMICAL INDUSTRIES and ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CHEMICAL INDUSTRIES and ASML Holding NV, you can compare the effects of market volatilities on CHEMICAL INDUSTRIES and ASML Holding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CHEMICAL INDUSTRIES with a short position of ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEMICAL INDUSTRIES and ASML Holding.

Diversification Opportunities for CHEMICAL INDUSTRIES and ASML Holding

-0.38

Correlation Coefficient

CHEMICAL INDUSTRIES  ASML Holding

Very good diversification

The 3 months correlation between CHEMICAL and ASML is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CHEMICAL INDUSTRIES and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV and CHEMICAL INDUSTRIES is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CHEMICAL INDUSTRIES are associated (or correlated) with ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of CHEMICAL INDUSTRIES i.e., CHEMICAL INDUSTRIES and ASML Holding go up and down completely randomly.

Pair Corralation between CHEMICAL INDUSTRIES and ASML Holding

Assuming the 90 days trading horizon CHEMICAL INDUSTRIES is expected to generate 0.15 times more return on investment than ASML Holding. However, CHEMICAL INDUSTRIES is 6.56 times less risky than ASML Holding. It trades about 0.13 of its potential returns per unit of risk. ASML Holding NV is currently generating about -0.01 per unit of risk. If you would invest  42.00  in CHEMICAL INDUSTRIES on May 17, 2025 and sell it today you would earn a total of  1.00  from holding CHEMICAL INDUSTRIES or generate 2.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CHEMICAL INDUSTRIES  vs.  ASML Holding NV

CHEMICAL INDUSTRIES

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in CHEMICAL INDUSTRIES are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, CHEMICAL INDUSTRIES is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ASML Holding NV

Risk-Adjusted Performance

Weakest

Over the last 90 days ASML Holding NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, ASML Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CHEMICAL INDUSTRIES and ASML Holding

The main advantage of trading using opposite CHEMICAL INDUSTRIES and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEMICAL INDUSTRIES position performs unexpectedly, ASML Holding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ASML Holding will offset losses from the drop in ASML Holding's long position.

The idea behind CHEMICAL INDUSTRIES and ASML Holding NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.